The new competitive imperative is true supply chain autonomy – one that senses disruptions in real time and takes corrective actions with no human intervention. This concept might seem visionary, but it’s increasingly within reach. The important thing to remember is that full autonomy is a journey — and you’re probably already taking one of these seven steps that place your company on the path.
The old supply chain mantra used to be “cheaper, faster, better” — but that formula lacks the sophistication to describe the incredible challenges confronting companies today. Ever-changing customer demand, skyrocketing service expectations and increasing competition mean that companies must make radical changes in their business models.
In today’s complex, volatile environment, companies need to sense disruptions in real time, wherever they occur in the global supply chain, and correct course immediately to keep their customer promises. They need to create personalized product and service offers. And they need to plan and collaborate beyond the four walls of their own enterprise, establishing visibility to all trading partners.
The solution? Supply chain autonomy. Just as digitalization has given rise to today’s challenging business environment, artificial intelligence (AI) and other advanced technologies can help companies master this environment. By creating an autonomous end-to-end supply chain that gathers real-time data, recognizes disruptions and takes immediate, strategically sound action, companies can establish a significant competitive edge.
A Step-by-Step Approach to Supply Chain Autonomy
For the typical business, this vision might seem out of reach. But innovative companies are already achieving autonomous decision making across their supply chains — and realizing significant financial and productivity improvements.
These companies have demonstrated that full autonomy is not an overnight event, but a sweeping organizational and cultural change that takes time. Those businesses just getting started can expect a long journey, but one with plenty of incremental revenue, service and profitability rewards along the way.
Following is a list of seven key steps that companies can take to achieve the vision of the truly autonomous supply chain.
Step 1: Improve Your View
To make strategic decisions without human intervention, the autonomous supply chain must first recognize problems. This means increasing visibility over thousands of miles and dozens of trading partners, so that all possible threats, risks and opportunities can be seen. This perspective must be comprehensive and objective, taking into account all internal and external signals, drivers, constraints and conditions.
Most companies have implemented digital technologies in order to increase their supply chain visibility and obtain a “big picture” view. In doing so, they have not only started on the journey to full autonomy, but they have realized impressive standalone results.
Step 2: Know, and React, in Real Time
The digital revolution has provided every business with a wealth of data about customer demand, costs, inventory levels, constraints, and other key performance factors. Companies can also easily access third-party data that’s relevant to the supply chain, such as long-term weather forecasts and social media posts.
The downside? There’s so much data that companies don’t know what to do with it. They struggle to separate trivia from the key information that could impact their supply chain.
Today there are rich resources to help with this challenge, including Internet of Things (IoT) sensors that gather critical real-time data and predictive analytics capabilities that make strategic sense of it. Armed with these meaningful insights, AI decision-making engines can make the right choices, acting autonomously.
In addition to supporting the journey toward supply chain autonomy, real-time data collection and analysis deliver enormous short-term impacts.
Step 3: Create a Strategic Workforce
A lot of media attention has focused on the fear that autonomy and AI will replace human workers. While it’s true that advanced technology can surpass human cognition in gathering data and making choices, these capabilities allow human employees to take a more strategic role.
Artificial intelligence and machine learning align the entire supply chain team by bringing the most critical issues to the forefront, where they can be acted upon. As AI flags exceptions and communicates key metrics, the workforce is united around shared priorities. While intelligent technology fulfills a tactical role, humans can focus on more strategic activities.
The top-level advantage is obvious. But the tactical gains can also be significant, because smart technologies can identify issues that employees might miss.
Step 4: Turn Partners into Stakeholders
Today’s supply chains are dispersed across thousands of miles, multiple continents and dozens of trading partners. To maximize collaboration and alignment, companies need to share common technology platforms and applications with their trading partners, to ensure real-time visibility and responsiveness.
Flowcasting is an emerging concept that’s helping to make this vision a reality. Flowcasting brings all trading partners together to collaborate on a shared, continuously updated forecast that represents a single version of the truth. Partners can collaborate to identify and correct any mismatches between supply and demand in real time. Instead of scrambling to manage out-of-stocks later, and placing blame, supply chain partners can work together in advance and take proactive steps to avoid these kinds of problems.
Step 5: Reinvent “the Way We Do Things Here”
It’s difficult for organizations to let go of traditional practices and “the way we do things here.” But supply chain autonomy demands an organizational and cultural change. Traditional workflows and processes no longer fit.
Most companies need to establish new levels of collaboration and connectivity, supported by new technology tools and interfaces. Employee roles and accountabilities must also change. Innovative new data storage and cloud computing capabilities, along with software customization, enable the increased volume of data collection and analysis required to support AI.
But there’s no need for companies to “re-invent the wheel” as they install new workflows, processes and technology assets. Many organizations have already mastered the autonomy puzzle with the help of technology vendors and consultants.
Step 6: Act with Strategic Purpose
Supply chain autonomy requires a gradual, incremental application of technologies in the areas where they deliver the greatest strategic rewards. But how do organizations know where to start?
Companies should begin by looking at their core competencies, their most urgent customer needs and their most critical decisions. Then they should assess the information they’re collecting, to establish a relationship between data and decision making. Finally, they should apply the right set of tools and practices to support fact-based, automated decision making in these critical areas.
Step 7: Honor the Journey
While AI and hands-free decision making once seemed like science fiction, today innovative businesses are already making significant progress toward achieving an autonomous supply chain that self-corrects, without any human intervention.
Wherever your company is in the journey toward supply chain autonomy, it’s important to remember that it is a long journey, one that begins with single technology applications in the most crucial areas of your business.
Your company has probably already taken steps to increase visibility, improve collaboration, install efficient workflows or improve employee productivity — which means you have already begun the journey toward supply chain autonomy.
While achieving supply chain autonomy is a challenging undertaking, it is rapidly becoming a competitive imperative — and with good reason. As shown by pioneers in applying AI and other advanced technologies, the outcomes make the journey worthwhile.
Victoria Brown is JDA‘s Director of Solutions and Content Marketing for JDA’s Supply Chain Execution products, covering critical topics such as warehouse management, logistics, and labor. Prior to joining JDA in 2019, Victoria served as Research Director of Global Supply Chain Execution for IDC, as well as a Warehouse and Traffic Operations manager for FritoLay and Procter & Gamble. She holds both an M.S. in Operations Design and a B.S. in Management Engineering from Worcester Polytechnic Institute.
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